The Costa Mesa-based developer known for hip Orange County commercial venues such as The Lab, The Camp and The Packing House wants to see the curtain rise again on Newport Beach's historic Balboa Theater.

The Newport City Council voted unanimously on Tuesday night to enter into a nine-month long exclusive negotiating agreement to work with Lab Holding LLC on a proposal to rejuvenate the theater 88-year-old building, which has been vacant for years. The agreement would give the city and Lab Holding time to finalize the plan and negotiate a sale of the city-owned property to Lab. The plan and sale ultimately would go to the council for approval.

Lab Holding is proposing to restore the theater's original architecture, including the marquee, which could reflect the 1920s wrought-iron style or the neon design used later. The venue would have a cafe, which would open to the street, a small stage for live music and a second stage for private events. The live-music stage would have an indoor pub but no seating.

Courtesy Lab Holding

A rendering depicts Costa Mesa-based developer Lab Holding’s proposal to restore the original look of the 1920s-era Balboa Theater in Newport Beach. The venue would include a cafe, a stage for live music and a second stage for private events.

A rendering depicts Costa Mesa-based developer Lab Holding’s proposal to restore the original look of the 1920s-era Balboa Theater in Newport Beach. The venue would include a cafe, a stage for live music and a second stage for private events. (Courtesy Lab Holding)

The venue could be called the Balboa Theater, the Historic Balboa Theater or The Balboa, according to the proposal.

"First and foremost, we view the Balboa Theater as a local historic treasure and as such should be repurposed to serve the local community, maintaining its original entertainment mission," the proposal states.

The developer drew inspiration from the Rockwood Music Hall of New York City, a three-stage live-music venue on the Lower East Side of Manhattan with a capacity of about 330 patrons.

"Having booked local musicians over the course of the last 20 years at the Lab and Camp properties [on Bristol Street in Costa Mesa], and now on a weekly basis for the vibrant Anaheim Packing House, we believe the O.C. music scene needs a home with historical soul," the proposal states.

The theater, at 707 E. Balboa Blvd. on the Balboa Peninsula, has a storied past.

It first opened in 1928 as the Ritz Theater on the former site of the Rendezvous ballroom, which had been destroyed by a fire a year earlier. The theater, which originally housed vaudeville shows, operated briefly as a speakeasy during the tail end of the Prohibition era, according to historical accounts.

File photo / Daily Pilot

The old Balboa Theater building still bears the sign of the Balboa Performing Arts Theater, an unsuccessful attempt by the Balboa Performing Arts Theater Foundation to renovate the building and turn it into a multiuse venue for music, dance, theater, films and performing-arts education.

The old Balboa Theater building still bears the sign of the Balboa Performing Arts Theater, an unsuccessful attempt by the Balboa Performing Arts Theater Foundation to renovate the building and turn it into a multiuse venue for music, dance, theater, films and performing-arts education. (File photo / Daily Pilot)

In 1939, the venue became known as the Balboa Theater and began showing films. For several years in the early 1970s, it operated as an adult theater showing X-rated movies under the name Pussycat Theatres.

By the late 1970s, it had transformed again, showing revivals of popular films including "The Rocky Horror Picture Show."

The city bought the property in 1988 for $480,000. The theater fell on hard times in the early '90s and was shuttered in 1992.

In the years after its closure, some residents held out hope that the theater would again entertain the masses.

The Balboa Performing Arts Theater Foundation launched a fundraising effort in 2010 to renovate the building with plans to transform it into a 320-seat multiuse venue featuring musical acts, dance and theater performances, films and performing-arts education.

But fundraising did not prove fruitful.

In 2014, the city proposed turning the theater into a city-run fine-arts center offering exhibitions, movies, live performances and workshops in arts, crafts and music. But it was difficult to find widespread support for a city-run theater, council members have said.

Transforming the aging venue, with its worn floor, deteriorated ceiling and leaky roof, was expected to cost millions, according to city estimates.

The City Council decided about a year ago to put the theater up for sale. Officials weighed proposals and interviewed five potential buyers, ultimately deciding on Lab Holding.

"I'm very pleased we have identified a company like Lab Holding that has an outstanding reputation for precisely this type of community regeneration project," said Mayor Diane Dixon, who represents the peninsula area. "If all systems move forward in fulfilling the terms of the agreement, I believe it will be a highly valued member of the community."